Being Wealthy Scares Me

I’m doing everything I can to ensure Girl Ninja and I are well taken care of, not just in retirement, but throughout our entire life. I know if I work hard, spend diligently, and save consistently, we can live a comfortable life. Heck, we might even end up being rich.

Funny thing is, being rich scares me…bad. I was reading through an article on CNN the other day titled “Secrets of Extreme Savers“. In the article, eight different families are highlighted for being crazy awesome savers, often banking 50% or more of the their take home pay. Their savings habits have, over the years, made them wealthy. I enjoyed reading each families story. It reminded me hard work pays off.

While I enjoyed the testimonies, I was totally caught off guard by some of the comments people left on the article. Here are a few that stood out…

“Show average Americans saving…not lawyersbusiness owners people making six figures or a couple pulling in 250k a year.”

“Apparently the point of this article is that, if you make well over a 6-figure income and live in a low cost of living area, you can save a lot of money. Glad to see CNN worked hard to find something relevant to the majority of the population.”

“All these people make an excellent living. I found this article completely useless. Except for the one woman who has multiple streams of income. That is a useful idea.”

“I just love it when they post articals about wealthy people that are able to save 1/2 their pay. LOL!! Any idiot can save 50% of his or her income if their banging down 200k a year, UNREAL..”

Let’s play a game shall we. It’s called “I spy.” Ready? I spy with my little eye something bitter, something jealous, and something pathetic. Do you know what it is? If your guess was those four commenters, you’d be 100% right.

While I understand the majority of people don’t make a six figure income, I hardly beljeve that rendered the article useless. People seem to write off the fact that even though these people made a lot of money, they chose to save most of it, instead of spend it. I find that encouraging and motivating.

Articles like these scare me. They make me think twice about amassing a small fortune. Will people appreciate the fact that I worked hard, and saved/invested a ton to get rich? Or will they say I’m not relatable and a poor example of financial responsibility since I have so much more money than them?

I’d ask why there is such a resentment towards the wealthy, but I don’t feel like opening up that political can of worms. All I’m saying is this, If someone works hard (aka goes to law school or starts their own business) and ends up making a generous salary, we should be excited for that person and excited that we to have the potential to do something similar. No bitterness or envy necessary.

What do you think? Do you side with the commenters? Did you find those stories motivating or annyoing? Why is it a bad thing to be wealthy?

 

Insurance agents don’t all suck

I’ve always put insurance agents in the same category as used car salesman. I thought they were all sleazy, creepy, pervy, slimy, (insert negative word here), and just downright awkward. Only selling products that are either overpriced or unnecessary. Turns out, they aren’t ALL as bad as I thought.

One of my wife’s friends (let’s call him Beavis) is an insurance agent. He’s been doing it for about three years now and seems to love it. I never talked much with him about it, though as I didn’t want him to try and sell me a bunch of crap I don’t need. Last month, my car insurance was up for renewal so I decided to shop around a little bit.

I also shot Beavis an email to see if he could get me a better rate (or better coverage for my money) then what I was quoted. I provided him pretty much all the same information I gave to each of the insurance agencies. He got right to it and two days later, I had an email from him with a quote that was $200/year cheaper than anything I could find for myself. Not only was the price/coverage stellar, but it was even with a large national agency, not some small random company!

Intrigued by this whole insurance agent gig, I shot him an email requesting quotes for term life insurance and disability insurance. Sure enough, he got back to me with quotes that were cheaper than, or as good as, what I could find.

Call me crazy, but I’m sold on the idea of going through Beavis for all my insurance needs from now on. I’m really glad/surprised he was, not only able to save me money, but totally changed my view of the insurance game. Don’t get me wrong though, I’m still convinced most agents are as crazy as this guy looks…


What’s your opinion on insurance agents? Have you considered using, or do you use one? Was I wrong to assume insurance agents are like those sleazy used car salespeople?

Have you ever judged an industry or profession before, only to be pleasantly surprised it’s not ALWAYS as bad as you thought it was?

Invest in the right opportunity

Just a few weeks ago I opened the floor up for discussion regarding short to mid term investing strategies. I didn’t really know where I should be putting our extra savings. I was thinking I could put some in the bank, some in bonds, some in stocks, and invest the rest in this guy…

Many of you took the time to provide a little insight and let me know what you would do. Thankfully I’ve reached a decision.

I’m going to invest in opportunities.

Ha, how’s that for vague? Here’s my tentative game plan….

– Give away 10% of income.
– Contribute 15% gross income to retirement (401K and Roth IRA).
– Maintain a lifestyle that allows us to live on my income, so we can bank Girl Ninja’s.
– Put anywhere between $15,000 to $30,000 in our savings account each year.
– Wait.

You see that last step? It’s the most important. I want to build as much liquidity as possible so I can afford to take advantage of fantastic opportunities as they presents themselves. Here are 3 examples of what those opportunities might be…

1) Purchase an investment property for pennies (foreclosure, auction, market plummet, low interest rates, etc).

2) Throw money in the stock market when it is on sale…

3) Have the ability to do what I want, when I want, all because my bank account is loaded (e.g. take advantage of cheap airfare, pay cash for a new car when the auto industry is suffering, remodel the kitchen when materials are deeply discounted, etc).

While my savings account may only offer me a meager 1.1% return, the liquidity and flexibility it affords could lead to much higher gains (both financially and personally). Heck it’s worth a shot at least.

Are you saving up for the ‘right’ opportunity? Have you ever been presented with a fantastic deal, but lacked the discretionary savings to take advantage of it? Is that unicorn man not the creepiest thing you’ve ever seen in your life? Okay, second creepiest, this picture (that I’ve posted before) being the first…

Best short term investment strategies

homeless ninja

If you’ve learned anything about me over the last 18 months, it’s that I love to make a plan. In fact, I’ve considered legally changing my name to Planny McPlannerson, but then realized I would probably get beat up for having such a dorky name. As much as I love setting up game-plans, I have to admit the short to mid term investing gig scares the bajeezes out of me.

My financial game-plan thus far has been pretty simple…

  • Make a decent salary
  • Get married to a total babe that also makes a decent salary
  • Direct 15% of gross income towards retirement
  • Maintain reasonable expenses
  • Don’t piss off previously mentioned wife
  • Put most of our discretionary income in our savings account

As I’ve frequently mentioned, GN and I are putting 15% towards retirement. Could we up that amount if we wanted? Sure, probably around 40%, but I want to be careful not to over invest in my retirement funds. After all, what good would having $6,000,000 in IRA’s do for me, when I’m 45?

I need to start learning strategies for 10 and 20 year time horizons. I know a decent amount about Roth IRAs and 401ks, but I know diddly squat about bonds, short term treasury funds, and interpretive dancing (side note: am I the only person that thinks interpretive dancing is just code for “I suck at dancing, so I pretend I’m interpreting music”?).  Incidentally, I became aware kind of recently that you can also trade in government bonds using platforms such as this one from Avatrade, but I’m going to make sure my investing knowledge is up to speed before I venture into more aggressive trading.

There are two primary reasons I know nothing about short term investing…

1) I’ve had no need to learn about it since I’ve spent the majority of my PF journey digging out of debt and building up liquidity.

2) I’m lame.

I know money that will be used within 5-ish years should be kept somewhere safe (like a money market, high yield savings, or CD) and I know retirement contributions should be made through a Roth, 401K, or traditional IRA, but I honestly don’t know what the ‘standard’ protocol is when it comes to saving for 10-20 year time horizons.

Let’s pretend I had $20,000 in cash sitting in my savings account for a car purchase the wife and I plan to make in 2020. I find it hard to believe the 1% interest my “high yield” savings account pays is the best place for that money. There’s got to be a better option right?

This is where you, a much smarter person, can come in and help a Ninja out. Pretend you had $20,000 cash that you knew you wouldn’t need to use for another 10 or 15 years. What would you do with the money? Would you buy bonds? Would you go 50% stocks/50% cash? Would you stay all cash? What means would you take to try and maximize your return, while minimizing your exposure to risk? What investment strategies have solid 10-20 year track records?

I literally know nothing about this area of personal finance and would greatly appreciate any insight so I can go research each option and be less stupid.

There’s always something

Random Note: I not really a big fan of calling Wife Ninja, Wife Ninja. I much preferred Girl Ninja (GN), and since this is my blog, and she is a girl, I’ve decided to reincarnate her title as Girl Ninja.

Ninja Mansion

I was talking with Girl Ninja’s uncle the other day about normal guy things (sports, money, unicorns, etc). We then started talking about housing and what that looked like for Girl Ninja and myself. I told him we were planning to save pretty aggressively so we could have up to $100,000 to use for a down payment. I told him “I feel like once we buy a house, I will finally relax and be more of a free spender. After all, a house is the last big purchase I have to look forward to…right?” Yeah, I know, I realize how stupid that comment was.

When I was paying off debt, I thought that becoming debt free would be my ultimate release from frugality. But then came a wedding and a honeymoon, so I focused on saving up for those expenses. Now, almost three months in to the married life, I’m all about saving for a huge down payment.

But, and this is a big but, I’m officially coming to terms with the fact that there will always be something. Once Girl Ninja and I ‘take the plunge’ and purchase our first place, we’ll just begin saving for our next ‘project’. A kitchen remodel, children’s college funds, a batmobile, etc. When will it end? Never.

Although this epiphany could seem depressing, it was a welcome (and needed) reminder. A reminder that I will never “have it ALL together” no matter how hard I try. A reminder that I shouldn’t put off having fun today, so that I can have fun tomorrow. A reminder, that I sometimes lose sight of what’s important.

I obsess over a stupid goal (like saving to buy a home), and allow that goal to distract me from a huge part of the personal finance puzzle. And that part, mi amigos, is spending. Sure, Girl Ninja and I could put every un-budgeted dollar we earn towards saving for the future Ninja pad, but what would that mean for the next few years of our lives?

I’ll tell you. It would mean a lot of not-fun-having! And last time I checked, we both like to have fun. So, while we will continue to work towards our goal of home ownership, we will also make a point to enjoy our journey through that process.

What is your current financial goal? Do you allow it to distract you from contentment, like I do, sometimes? Where is the balance between healthy focus and uber-awkward awkwardness?

On a FUN note, we just got our wedding pictures back. We haven’t looked through all 1,200 of them yet, but here are a few of our favorites!!!! (more to come later)


Lower your bills like a gangsta

lil wayne saves money
I can’t think of anything more gangster than saving a little money.  Seriously, who doesn’t want to save a little green? I sure as heck do, and that’s why I make sure my money is working hard for me. My favorite way of doing this? Shopping around, or as Snoop Dog would call it “Shop  it like it’s hot”. All it takes is a few minutes on the phone.

That’s right, it’s time to get your butt on the phone and start calling your car insurance company,  cable/internet company , cell phone provider, credit card companies, etc and play some hardball. I do it every year, and I often walk away with a better deal than I had before. Here’s a real example of a conversation I had with a former cable provide…

Me: Hi, I’ve been pretty satisfied with my cable service over the last year, but have received a pretty enticing offer from one of your competitors.

Them: And what offer is that?

Me: Basically everything you guys offer me, plus a few extra movie channels.

Them: And how much is their service expected to cost?

Me: The same price as my current plan with you guys.

Them: Well  it looks like we can offer you six months of HBO and Showtime for free.

Me: Hellz Yeah! Sign me up.

Sure, the phone call didn’t save me any money, but it sure as heck made my existing service exponentially more awesome. I encourage you to do the same. Hop on the phone with a competing car insurance company and talk to them about your current plan. I guarantee the new company will do everything they can to provide you a lower payment and win your service. A few minutes on the phone could literally save you hundreds of dollars a year. I don’t know. Maybe I’m a freak, but I definitely get some kind of sick pleasure when trying to finagle a deal. I love negotiating!!!! Let me give you another example of what a phone conversation with a competing car insurance company could look like…

You: Hi, I’ve been paying $200 a month on car insurance for the last six months, and I’m kind of sick of it. How about lowering my bill to $30/month instead? And throw in a warm apple pie while you are it.

Them: Let me see here. Well, you’re in luck. It looks like you called right in time to take part in our newest promotional offer. I’m just gonna run a few numbers real quick.

You: Sounds great, but make it quick. Oprah’s about to start.

Them: Alright sir/madam, it looks we can drop your payment from $200/month to the $30/month as requested, but unfortunately we are all out of apple pie. Would you be okay with banana cream?

Alright, maybe the last example is slightly ridiculous, but so is being a lazy a$$ and not trying to get the best deal out there. Grab your phone and make a few calls. You won’t regret it.

Here’s a list of some of the services you should try and negotiate with…

Car Insurance: Call competitors. tell them your current plan coverage and price and ask if they can beat it. If they can’t, you know you got a good deal. If they can, you just saved yourself some dough.

Cable: Again call the local competitor to see what their current price plans and promotions are. If you don’t have luck with them call your current provider and ask if they have any specials running. Pretty often they can give you access to HBO or other premium channels for a few months.

Credit Card: This is one of my favorite things to do. A few times a year, I call good ol Bank of America and ask them for a credit line increase. About 50% of the time, I get it. Why ask for the increase? Assuming I don’t increase my spending habits, having a higher credit line should help my credit score. If you currently have CC debt, it doesn’t hurt to call and see if they will lower your interest. Not too sure if the banks will budge with all the craziness in the markets, but it’s worth a shot.

Cell Phone: Call current provider and notify them you are considering a switch (even if you aren’t) and ask if they have any plans or promotions that will keep you from jumping ship.

Apartment: If you are renting (on a short term lease) hop on craigslist and see if there is another apartment similar to yours for a cheaper. I’ve moved quite a few times because I found something as good (or better) than my current pad for hundreds less. Totally worth it if you don’t mind moving.

Your assignment today is to go save yourself some money. Does anyone else out there enjoy negotiating? Do you “make the rounds” and ensure you are getting the best bang for your buck? What other services allow you the freedom to shop around?

Beat up debt, but save too

My boy Eric hooked me up with a guest post today. He has a finance degree from the University of Colorado and an MBA from the University of Denver. He is currently a senior treasury analyst at a Fortune 500 company. He blogs about personal finance at Narrow Bridge and the Middle East at The Israel Situation.

Kicked in the face

It feels really good to kick debt in the face. In the last four years, I have bought a brand new, $17,000 car and taken on about $40,000 in student loans working on my MBA. Of the $57,000 in debt, less than $14,000 remains. I have a plan to be paid off completely in less than two years. I have managed to live below my means and kick debt in the face. However, beating the hell out of debt is only one part of the personal finance puzzle. It is also important to keep track of your finances and build up a safety net while paying down your debt. The two main savings methods that I am employing are investing in cash savings and investing in my retirement, but I had not been focusing on both of those as much as I should have until recently.

I have felt great about paying off my debt so quickly. Paying off a $90,000 MBA within two years of graduating is something anyone should be proud of, but I recently checked in on my savings account and realized I only have enough cash on hand to live for about 2 months, not the 3-4 that I should have saved. I am on track with my retirement savings, but that can always use a increase as well. Because of this, I have developed a two prong strategy to both kick debt in the face and kick yourself in the butt to start saving more.

Part I: Kicking Debt in the Face

You have probably heard of the debt snowball at some point if you are a regular on the personal finance blog circuit. If not, here is the low-down: Pay the minimum on all of your debts except for your highest interest debt, where you put every dollar you can. This is scientifically the fastest way to pay down your debt.

Part II: Kicking Yourself in the Butt

There is no big secret way to save money, you just have to set a plan and follow it. Sites like Mint.com and banking sites like SmartyPig can help you track your savings goals. You can also set up a separate savings account at your bank if you want a little extra barrier between your savings goal and your spending accounts.

The smartest way to save your money is to not have to think about saving it in the first place. The best way I know of to do this is to set up your direct deposit from work to deposit your paycheck into two accounts. A certain amount of money is designated to go to the savings account and the remainder goes into your checking account. Keep your savings account deposit going as long as you have to in order to reach your savings goal.

Increasing your retirement savings is also an easy, automated process. Most employers let you take money directly out of your paycheck to be deposited into a 401(k), Roth 401(k), or IRA account. Every time I get a raise, I increase my contribution to my retirement accounts by 1%. If you are not taking advantage of a 401(k) match from your employer, you are giving up free money! Set that contribution level right now. If you are already contributing to your retirement accounts, just increase your level by a percent or two to keep building your retirement accounts. If you are worried about locking the money away, try an automated investing plan at a brokerage that allows you to sell and withdraw your funds whenever you want without tax implications.

Whatever you do, just make sure you are saving for emergencies and your future, and while you are at it, make sure you are paying off your debt too.

Questions: How did you decide how much to save vs use to pay down debt? Do you use the automated saving methods above? Why is Ninja so freakin’ sexy?

Editors Note: My only beef with Eric is that he likes to Kick debt in the face, where I prefer the punching method. And yes, I added that last question, I’m pathetic.